CEAT to strengthen local tyre market

Hiran H. Senewiratne

CEAT Sri Lanka originally known as Kelani Tyres is looking to strengthen the local truck and motor tyre market with the slump in global rubber prices, Managing Director Rohan Fernando said.

“The global financial crisis has reduced global tyre consumption. Therefore, international rubber prices have also come down in view of the current financial crisis during the last few months,” Fernando told Daily News Business.

He said with the global impact, local rubber prices have gone down, which constituted 40 per cent for the manufacturing of tyres, while 60 per cent of raw materials are being imported from other countries. With the reduction of local rubber prices, it is expected that the cost of production will come down in the future, he said.

Fernando said that global recession has been softening the rubber and rubber based sectors including the tyre markets in most of the countries especially in the USA. However, it is an opportunity for the company as it could pass the benefit to the consumer. The company’s monthly manufacturing capacity is 1200 tonnes and a certain quantum is exported to Indian Ceat company which is one of the leading brands in India.

According to Fernando 60 per cent of truck tyres and 12 per cent of the normal vehicle tyre market is enjoyed by the company in Sri Lanka in their Kalutara and Kelaniya plants and is expected to further establish in the local market given the current market scenario.

Ceat’s radial plant has been set up with the latest machinery, complete with the latest tyre production technology. The fully- automated, high-productivity plant, operating in controlled temperature and humidity conditions, will produce steel-belted radial tyres with high-durability polyester carcass and unique tread patterns designed for Sri Lankan roads.

Fernando said that they are planning to consolidate in the local radial tyre market and has to compete with more than 20 importers. Therefore, with lower rubber prices will be able to capitalise on the business in the future. Ceat- Sri Lanka Associated Holdings (Pvt) Ltd, a Ceat India, Associated Motorways and Kelani Tyres joint venture is the largest tyre manufacturer in Sri Lanka.